Price discrimination, Managerial Economics

Let there be two consumers A and B, each buying at most two units of a good. A values having one unit at £10 and having two units at £12 whereas B values having one unit at £8 and having two units at £16. There is a monopolist providing this good at zero cost but who cannot distinguish among the two consumers.

(a) What is the pro?t maximising uniform price of the good?

(b) Now suppose instead that the monopolist may design packages and charge one price for a single unit and a separate price for a package of two units. What will be the optimal prices?

(c) What kind of price discrimination is this (?rst, second or third degree)?

(d) Describe what the other two types of price discrimination would look like here?

Posted Date: 3/9/2013 5:33:56 AM | Location : United States







Related Discussions:- Price discrimination, Assignment Help, Ask Question on Price discrimination, Get Answer, Expert's Help, Price discrimination Discussions

Write discussion on Price discrimination
Your posts are moderated
Related Questions
Suppose that the price elasticity of demand for cereal is -0.75 and the cross-price elasticity of demand between cereal and the price of milk is -0.9. If the price of milk rises by

Q. Show Normal profit equilibrium? Normal Profits: With the condition of  MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM

Q. Characteristics of perfect competition market? Following are the characteristics of perfect competition market:  • Large Number of Sellers andBuyers: As there are a lar

Evaluate critically chamberlin''s model of monopolistic copetition

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

Drafting of Production Policy: Demand forecasts assists in drafting appropriate production policy so that there may not be any space between future demand and supply of a product.

Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function: AC=MC=10 and a potential entrant has a cost function: AC=MC=20


Q. Explain about Long run production function? Long run is a phase adequately long so that all factors together with capital can be changed. The factors that can be increase

Give short answer of following (a) Economics as a science. (b) Engineering Economics. (c) Economic Problem. (d) Meaning and characteristics of utility. (e)